TECHNO-ECONOMIC ANALYSIS: PRELIMINARY ASSESSMENT …

1 PEER-REVIEWED ARTICLE Badger et al. (2011). Economic analysis of bio-oil, BioResources 6(1), 34-47. 34 TECHNO-ECONOMIC ANALYSIS: PRELIMINARY ASSESSMENT OF PYROLYSIS OIL PRODUCTION COSTS AND material energy balance ASSOCIATED WITH A TRANSPORTABLE FAST PYROLYSIS SYSTEM Phil Badger,a Scott Badger,a Maureen Puettmann,b,* Philip Steele,c and Jerome Cooper c A TECHNO-ECONOMIC analysis was performed for a 100 dry-ton/day (90,719 kg/day) fast pyrolysis transportable plant. Renewable Oil International LLC provided the life cycle cost of operating a 100 dry-ton/day fast pyrolysis system using southern pine wood chips as feedstock.

2 Since data was not available from an actual large-scale plant, the study examined data obtained from an actual 15 dry-ton/day pilot plant and from several smaller plants. These data were used to obtain base figures to aid in the development of models to generate scaled-up costs for a larger 100 dry-ton/day facility. Bio-oil represented 60% of mass of product yield. The cost for the bio-oil from fast pyrolysis was valued at $ energy cost bio-oil and char was valued at $ Costs associated with purchasing feedstocks can drastically influence the final cost of the bio-oil.

3 The assumed cost of feedstocks was $25/wet ton or $50/dry ton. This paper is part of a larger study investigating the economic and environmental impacts for producing bio-oil / biocide wood preservatives. Keywords: Pyrolysis; Bio-oil; Wood chips; Economic analysis Contact information: a: President & Chief Manager, Renewable Oil International LLC, 3115 Northington Court, Box 26, Florence, AL 35630 USA; b: LCA Consultant, WoodLife, 8200 NW Chaparral Drive, Corvallis, Oregon, USA; c: Professor, d:Research Associate, Department of Forest Products, Mississippi State University, Box 9820, Mississippi State, MS 39762 USA.

4 * INTRODUCTION With growing concerns about our use of fossil-based fuels and associated greenhouse gas emissions, utilization of biomass for alternative fuel sources is on the rise. Biomass is defined as organic matter that is renewable and bio-degradable. Woody biomass, which is comprised primarily of carbohydrates and lignin, is produced through the natural process of photosynthesis. In nature woody biomass accumulates below and above ground in roots, stumps, bark, leaves, small stems, and branches of dead and live small trees and shrubs.

5 One of the major sources of woody biomass is from logging residues. Wood processing mills are another source of biomass where these can be burned onsite for energy generation (Puettmann and Wilson 2005) or higher valued residues can be made into panel products and used in such products as structural paneling or furniture. Until recently it was assumed that biomass collection and conversion to bio-fuels was too expensive. With increasing fossil fuel prices together with rapid PEER-REVIEWED ARTICLE Badger et al.

6 (2011). Economic analysis of bio-oil, BioResources 6(1), 34-47. 35 technological advances in conversion processes, the interest in bio-fuels is growing. Biomass availability was assessed by Gan and Smith (2006) on a regional basis. They reported that nearly half of the national available biomass ( million dry tons) is located in the southern United States, and this material has the potential to displace million tons of carbon. Biomass can be converted to either ethanol or bio-oil. Ethanol is an alcohol fuel made from the sugars found in plants and produced by fermentation or an enzymatic reaction.

7 Bio-oil is defined as an organic liquid fuel produced by a process called pyrolysis. Fast pyrolysis is the chemical decomposition organic materials by heat (500 C) in the absence of oxygen (Bridgwater et al. 1999). After cooling and condensation, a dark brown mobile liquid (bio-oil) is formed. Bio-oil typically has a heating value about half that of conventional fuel oil. The conversion process produces three main products: a liquid organic, char, and gases. While the procedure is related to the traditional pyrolysis processes for making charcoal, fast pyrolysis is an advanced process that is carefully controlled to give high yields of liquid.

8 Several studies have reported yields of 50-75% bio-oil, 15-25% char, and 10-20% gas (Gregoire and Bain 1994; Mullaney and Farag 2002). For nearly a decade TECHNO-ECONOMIC analyses have been performed for pyrolysis oil production (Gregoire and Bain 1994; Mullaney and Farag 2002; Ringer et al. 2006). Costs to produce bio-oil can be significantly different depending on the analysis and size of plant. Large-scale plant systems tend to generate lower production costs, despite the fact that they have not yet achieved commercial status.

9 A study by researchers at the University of New Hampshire investigated the conversion of wood chips to bio-oil as a substitute for #2 fuel oil (Mullaney and Farag 2002). They looked at a DynaMotive fast pyrolysis reactor with feedstock rates of 100, 200, and 400 metric tons/day. Production cost ranged from $17/GJ for a 100-dry metric ton/day (110 ton/day) to $13/GJ for a larger plant with a feed input of 200-dry metric ton/day (Mullaney and Farag 2002). Other reports have estimated production costs at $ and $ for a 220-dry ton/day and 110-dry ton/day plant size, respectively (Ringer et al.)

10 2006). This study provides a TECHNO-ECONOMIC analysis for the development of a transportable 100 dry-ton/day (dtpd) fast pyrolysis module system able to process pine wood chips (Renewable Oil International (ROI) 2009). The largest plant ROI has fabricated to date is a 15-dtpd. Since data was not available from an actual large-scale plant project, this study utilized data obtained from an ROI pilot plant and from several smaller plants with a similar design. The data was used to obtain base figures as a model to generate scaled-up costs for a larger 100-dtpd facility.